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“Seriously Delinquent” Auto Loans Surge, Car Sales Crash, But It’s Complicated.
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Feb 19, 2017 21:12:15   #
Doc110 Loc: York PA
 
02/18/2017 Wolf Richter: “Seriously Delinquent” Auto Loans Surge

Yves Smith
http://www.nakedcapitalism.com/2017/02/wolf-richter-seriously-delinquent-auto-loans-surge.html

Bank regulators have been warning, now it’s happening.
http://wolfstreet.com/2017/02/16/seriously-delinquent-auto-loans-subprime/

Bank regulators have been warning, now it’s happening.
The New York Fed, in its Household Debt and Credit Report for the fourth quarter 2016, put it this way today:

“Household debt increases substantially, approaching previous peak.” It jumped by $226 billion in the quarter, or 1.8%, to the glorious level of $12.58 trillion, “only $99 billion shy of its 2008 third quarter peak.”

Yes! Almost there! Keep at it! There’s nothing like loading up consumers with debt to make central bankers outright giddy.

Auto loan balances in 2016 surged at the fastest pace in the 18-year history of the data series, the report said, driven by the highest originations of loans ever.

Household Debt Increases Substantially, Approaching Previous Peak. Significant Changes in Debt Composition and Substantial Increases in Aggregate Household Debt in 2016 Overall
https://www.newyorkfed.org/newsevents/news/research/2017/rp170216

Alas, what the auto industry has been dreading is now happening: Delinquencies have begun to surge.

This chart – based on data from the Federal Reserve Board of Governors, which varies slightly from the New York Fed’s data – shows how rapidly auto loan balances have ballooned since the Great Recession.

At $1.112 trillion (or $1.16 trillion according to the New York Fed), they’re now 35% higher than they’d been during the crazy peak of the prior bubble. Note that during the $93 billion increase in auto loan balances in 2016, new vehicle sales were essentially flat:


No way that this is an auto loan bubble. Not this time. It’s sustainable. Or at least containable when it’s not sustainable, or whatever. These ballooning loans have made the auto sales boom possible.
But despite record low interest rates, the bane of the automakers is now taking place relentlessly:

“Seriously delinquent” auto loan balances, composed of all loans that are 90+ days past due, rose in Q4 to 3.8% of total auto loan balances. That puts them right between Q1 and Q2 of 2013, as auto credit was recovering from the Financial Crisis.
Last time auto loan delinquencies had surged to that level was after Q3 2008, as the Financial Crisis was tearing into the economy:


These seriously delinquent auto loans are an indication of what is next:
• Losses at auto lenders, particularly those specializing in lending to subprime borrowers, but also other lenders, including captives, such as Ford Motor Credit, which had already warned in its most recent outlook that “we continue to see credit losses increase.”

Ford Motor Credit Company LLC
https://www.sec.gov/Archives/edgar/data/38009/000003800917000014/fmcc1231201610-k.htm

• Tightening auto credit for consumers, as those losses begin to exact their pound of flesh from the lenders.

Some specialized subprime lenders might keel over.
Larger lenders with good quality loan portfolios will bleed but go on while tightening their underwriting standards in order to weather the storm. And that’s precisely what the auto industry is dreading: Tightening credit.

The auto boom over the past few years was funded by historically low interest rates and loosey-goosey underwriting, with long loan terms and high loan-to-value ratios, often over 120%. They made everything possible.

But they infused the $1.1 trillion in auto loans with some very big risks.
The Office of the Comptroller of the Currency (OCC), one of the federal bank regulators, has once again warned about the risk-taking by auto lenders:

Semiannual Risk Perspective, From the National Risk Committee
https://www.occ.treas.gov/publications/publications-by-type/other-publications-reports/semiannual-risk-perspective/semiannual-risk-perspective-fall-2016.pdf

Auto lending risk has been increasing for several quarters because of notable and unprecedented growth across all types of lenders.

As banks competed for market share, some banks responded with less stringent underwriting standards for direct and indirect auto loans. In addition to the eased underwriting standards, lenders also substantially layered risks (granted longer terms combined with higher advance rates resulting in higher LTV ratios).

These factors increased the credit risk in auto loan portfolios…. This embedded risk is now being reflected in lower recoveries at charge-off (higher loss severities) for both bank loans and securitized auto loans despite relative stability in used auto values.

Bank risk management practices and the ALLL, allowance for loan and lease losses should reflect the elevated risk profile and higher probable credit loss severities.

So it’s all there – the ingredients for bigger losses among banks and investors, a few failures of smaller specialized subprime lenders, and belated credit tightening, both out of necessity and due to lower competition among lenders as some of the most aggressive ones will be busy licking their wounds.

And auto sales – not long ago the truly hot sector in the US economy – are now confronted with these tightening credit conditions as growth has already been stalling.

Despite what you might think, automakers did not “cut back” on fleet sales in January. But keep an eye on rideshare companies. Read…  Car Sales Crash, But It’s Complicated


Car Sales Crash, But It’s Complicated. Despite what you might think, automakers did not “cut back” on fleet sales. But keep an eye on Uber & Lyft.
http://wolfstreet.com/2017/02/02/car-sales-crash-but-its-complicated/

Reply
Feb 20, 2017 10:29:31   #
Fay Guht
 
Lets measure real asset wealth in the US:

For sake if discussion, imagine some entity recalling all the loans on everything with a outstanding balance.

There goes the house. The car (s). The furniture. The education. The vacation. The clothes. The groceries. Ad infinitum.

Really, wealth in the US is an illusion.

Supported by easy credit.

Lets try an experiment:

Except for housing, buy nothing on credit. Nichs. Nada. Nutting.

Country wide.

Watch prices accomodate the new paradigm.

Reply
Feb 20, 2017 12:02:01   #
boatbob2
 
Im thinking a BIG part of the problem,is the price of new cars.the factories keep churning out these overpriced pieces of crap,and theres a gazillion of last years car models not being sold,so they offer LOOOWWW interest rates on financing,to sell their crap,that the consumers wouldnt have bought unless the interest rate was wwaayy down, and since their job pay raises (if they have a job) are stagnant,they cant afford to buy that car in the first place. AND most consumers have NO IDEA how to haggle the price of that overpriced piece of crap down,in the first place. take the car price,knock off 25%,make that offer to the dealers,and watch the fun begin. should be able to get at LEAST 10% knocked off of that car price,....

Reply
 
 
Feb 20, 2017 17:42:40   #
jack sequim wa Loc: Blanchard, Idaho
 
Doc110 wrote:
02/18/2017 Wolf Richter: “Seriously Delinquent” Auto Loans Surge

Yves Smith
http://www.nakedcapitalism.com/2017/02/wolf-richter-seriously-delinquent-auto-loans-surge.html

Bank regulators have been warning, now it’s happening.
http://wolfstreet.com/2017/02/16/seriously-delinquent-auto-loans-subprime/

Bank regulators have been warning, now it’s happening.
The New York Fed, in its Household Debt and Credit Report for the fourth quarter 2016, put it this way today:

“Household debt increases substantially, approaching previous peak.” It jumped by $226 billion in the quarter, or 1.8%, to the glorious level of $12.58 trillion, “only $99 billion shy of its 2008 third quarter peak.”

Yes! Almost there! Keep at it! There’s nothing like loading up consumers with debt to make central bankers outright giddy.

Auto loan balances in 2016 surged at the fastest pace in the 18-year history of the data series, the report said, driven by the highest originations of loans ever.

Household Debt Increases Substantially, Approaching Previous Peak. Significant Changes in Debt Composition and Substantial Increases in Aggregate Household Debt in 2016 Overall
https://www.newyorkfed.org/newsevents/news/research/2017/rp170216

Alas, what the auto industry has been dreading is now happening: Delinquencies have begun to surge.

This chart – based on data from the Federal Reserve Board of Governors, which varies slightly from the New York Fed’s data – shows how rapidly auto loan balances have ballooned since the Great Recession.

At $1.112 trillion (or $1.16 trillion according to the New York Fed), they’re now 35% higher than they’d been during the crazy peak of the prior bubble. Note that during the $93 billion increase in auto loan balances in 2016, new vehicle sales were essentially flat:


No way that this is an auto loan bubble. Not this time. It’s sustainable. Or at least containable when it’s not sustainable, or whatever. These ballooning loans have made the auto sales boom possible.
But despite record low interest rates, the bane of the automakers is now taking place relentlessly:

“Seriously delinquent” auto loan balances, composed of all loans that are 90+ days past due, rose in Q4 to 3.8% of total auto loan balances. That puts them right between Q1 and Q2 of 2013, as auto credit was recovering from the Financial Crisis.
Last time auto loan delinquencies had surged to that level was after Q3 2008, as the Financial Crisis was tearing into the economy:


These seriously delinquent auto loans are an indication of what is next:
• Losses at auto lenders, particularly those specializing in lending to subprime borrowers, but also other lenders, including captives, such as Ford Motor Credit, which had already warned in its most recent outlook that “we continue to see credit losses increase.”

Ford Motor Credit Company LLC
https://www.sec.gov/Archives/edgar/data/38009/000003800917000014/fmcc1231201610-k.htm

• Tightening auto credit for consumers, as those losses begin to exact their pound of flesh from the lenders.

Some specialized subprime lenders might keel over.
Larger lenders with good quality loan portfolios will bleed but go on while tightening their underwriting standards in order to weather the storm. And that’s precisely what the auto industry is dreading: Tightening credit.

The auto boom over the past few years was funded by historically low interest rates and loosey-goosey underwriting, with long loan terms and high loan-to-value ratios, often over 120%. They made everything possible.

But they infused the $1.1 trillion in auto loans with some very big risks.
The Office of the Comptroller of the Currency (OCC), one of the federal bank regulators, has once again warned about the risk-taking by auto lenders:

Semiannual Risk Perspective, From the National Risk Committee
https://www.occ.treas.gov/publications/publications-by-type/other-publications-reports/semiannual-risk-perspective/semiannual-risk-perspective-fall-2016.pdf

Auto lending risk has been increasing for several quarters because of notable and unprecedented growth across all types of lenders.

As banks competed for market share, some banks responded with less stringent underwriting standards for direct and indirect auto loans. In addition to the eased underwriting standards, lenders also substantially layered risks (granted longer terms combined with higher advance rates resulting in higher LTV ratios).

These factors increased the credit risk in auto loan portfolios…. This embedded risk is now being reflected in lower recoveries at charge-off (higher loss severities) for both bank loans and securitized auto loans despite relative stability in used auto values.

Bank risk management practices and the ALLL, allowance for loan and lease losses should reflect the elevated risk profile and higher probable credit loss severities.

So it’s all there – the ingredients for bigger losses among banks and investors, a few failures of smaller specialized subprime lenders, and belated credit tightening, both out of necessity and due to lower competition among lenders as some of the most aggressive ones will be busy licking their wounds.

And auto sales – not long ago the truly hot sector in the US economy – are now confronted with these tightening credit conditions as growth has already been stalling.

Despite what you might think, automakers did not “cut back” on fleet sales in January. But keep an eye on rideshare companies. Read…  Car Sales Crash, But It’s Complicated


Car Sales Crash, But It’s Complicated. Despite what you might think, automakers did not “cut back” on fleet sales. But keep an eye on Uber & Lyft.
http://wolfstreet.com/2017/02/02/car-sales-crash-but-its-complicated/
02/18/2017 Wolf Richter: “Seriously Delinquent” Au... (show quote)







Factually, over 45% of the auto industry cost surge since 1978 and compounded every year thereafter has to do with overreach regulations.
The second reason is the mafia style, over powerful unions.

Recall the libersl/leftist regulations and unions, that 2017 Ford 4×4 crewcab diesel would drop from $60,000 to $40ish something and the Chevy camaro that starts around $30ish would drop at or below $20 something.

And we still would have safe, and clean burning cars.

Ford has a European Ford Fiesta diesel that gets around 75 miles per gallon. ......but because of EPA overreach regulations, Ford cannot get the engine to run.

Reply
Feb 20, 2017 18:05:13   #
Fay Guht
 
boatbob2 wrote:
Im thinking a BIG part of the problem,is the price of new cars.the factories keep churning out these overpriced pieces of crap,and theres a gazillion of last years car models not being sold,so they offer LOOOWWW interest rates on financing,to sell their crap,that the consumers wouldnt have bought unless the interest rate was wwaayy down, and since their job pay raises (if they have a job) are stagnant,they cant afford to buy that car in the first place. AND most consumers have NO IDEA how to haggle the price of that overpriced piece of crap down,in the first place. take the car price,knock off 25%,make that offer to the dealers,and watch the fun begin. should be able to get at LEAST 10% knocked off of that car price,....
Im thinking a BIG part of the problem,is the price... (show quote)


You should charge a % age of the amount you save and negotiate for people. Be their rep. Dough for you. Savings for them.

Reply
Feb 20, 2017 19:54:01   #
boatbob2
 
I probably have went with 30 different people,to buy a new car,The dealers hate me,thats OK,I hate those dirty bastards too,I dont charge anything to haggle for them,I just like to piss of those rotten scum dealers,I win some,and I lose some, but,heres a true story about dealers, about a year ago,I was at a dealers in Ocala,fla,to pick up my car,after having a power window motor replaced under warranty,while I was sitting in the waiting room,a little old black lady was sitting there,when the service manager,told her ,that her car needed a new alternator,the installed price was going to be ,SIT DOWN,WAIT FOR IT,ITS COMING,$ 1355.00,I said WHAT,the SM told me to stay out of his business,then told me to shut up,I told him to bring the ladies car out,and IF he F----D,with me,I was going to put him into a wheelchair for the rest of his life,Suddenly he saw that I was serious,and brought the ladies car out, I told her to follow me to NAPA,I went into NAPA,and found that I needed the # off of the old alternator,Up to this time,I had NOT opened the hood,when the hood was opened,the alternator belt,was not on the alternator, I had a hard time getting that belt back on,but after I did,I told her to start the car,The alternator lite went out,I had my NAPA buddy put the guage on the alternator,and it was charging,the way it should, dealers and service managers are a buncrh of no good C--K suckers.probably not all,but a lot of them,The Lady wanted to give me $500.00,I told her,no charge,but,pay it forward....dealers routinely charge $85 to $115 an hour,I have a buddy,that has worked for me,for over 30 years,I pay him $25.00 an hour straight time.Find a buddy like mine,and to hell with dealers,UNLESS its no charge warranty work.

Reply
Feb 20, 2017 20:09:58   #
Fay Guht
 
Ah. An honorable american. We can all learn from you.

Next time film em. Then follow through to the parts shop. Film them. Then post it.

I cant believe anyone would buy (for everyday use) a complicated and sophisticated car. Why pay these rates? No one can afford to pay the exorbitant rates.

Get something simple, and bank the difference.

They pidgeon us on the idea that we need to show one another up.

The car companies deserve nothing. If they can save a buck they'll let you die in an exploding Pinto or whatever.

Show no loyalty.

If you have to have a status car, buy something to use on the weekends, THAT DOESN'T DEPRECIATE. An old Lincoln. Or GTO. Or Mercedes or Rolls. Or whatever.

Reply
 
 
Feb 21, 2017 00:29:43   #
jack sequim wa Loc: Blanchard, Idaho
 
boatbob2 wrote:
I probably have went with 30 different people,to buy a new car,The dealers hate me,thats OK,I hate those dirty bastards too,I dont charge anything to haggle for them,I just like to piss of those rotten scum dealers,I win some,and I lose some, but,heres a true story about dealers, about a year ago,I was at a dealers in Ocala,fla,to pick up my car,after having a power window motor replaced under warranty,while I was sitting in the waiting room,a little old black lady was sitting there,when the service manager,told her ,that her car needed a new alternator,the installed price was going to be ,SIT DOWN,WAIT FOR IT,ITS COMING,$ 1355.00,I said WHAT,the SM told me to stay out of his business,then told me to shut up,I told him to bring the ladies car out,and IF he F----D,with me,I was going to put him into a wheelchair for the rest of his life,Suddenly he saw that I was serious,and brought the ladies car out, I told her to follow me to NAPA,I went into NAPA,and found that I needed the # off of the old alternator,Up to this time,I had NOT opened the hood,when the hood was opened,the alternator belt,was not on the alternator, I had a hard time getting that belt back on,but after I did,I told her to start the car,The alternator lite went out,I had my NAPA buddy put the guage on the alternator,and it was charging,the way it should, dealers and service managers are a buncrh of no good C--K suckers.probably not all,but a lot of them,The Lady wanted to give me $500.00,I told her,no charge,but,pay it forward....dealers routinely charge $85 to $115 an hour,I have a buddy,that has worked for me,for over 30 years,I pay him $25.00 an hour straight time.Find a buddy like mine,and to hell with dealers,UNLESS its no charge warranty work.
I probably have went with 30 different people,to b... (show quote)




Your border line a jackass. I ran into a racist conservative, so all (using your words ) are coc#suc×÷#!.
30 + years running car dealerships Honda, Ford, Toyota, Chevrolet, Kia, Subaru, to name a few. Yes there were some jackass car dealers, but.... I ran "president award" dealerships and know of many , many great dealers.
I recall Firestone had widespread issues, but has long since fixed them.

Dealers have mIllinois of dollars tied up in inventory, buildings, ect, ect and somehow to the "ignorant " profit is a dirty word.

Costco doesn't put anything on their shelves unless it has as least a 17% profit margin. Where is the outcry? No the public loves Costco and understands they are in it to make money

Yet a car dealer operates on a 7-10% profit margin. Oh my lord the "dirty" car dealer is making $2000 or evendors $3000 on a $40,000 investment.
Considering a 40k investment, paying sales commission, office expense, taxes, lot attendents, detail, rent/mortgage, (The big cost) advertising . And when the market is soft, buyers are few, the dealer gets to pay flooring on every car on the lot 1.5-3% of invoice (every month) until the car sales. So now his $3000 profit may be negative. Yes negative.
Then when something really hot comes out and in short supply, something everyone wants, the dealer marks it up $999.-$1,999. Second sticker just so he can recoup his other losses of the up/down market.
Then omg that "dirty word" profit.... the outcry of the dealer "ripping" off the buyer.
If it were not for a car dealer "asking full price" there would be no inventory, no car dealer.
Then that hot car making the dealer money goes down in price when the factory catches up on supply and floods the market with inventory, back to low profit margins.

Used cars. I spent on average $1,200. Reconditioning cost per used car, and $1,800 per truck for (late models only) used car inventory. Selling premium used cars. Many other new car dealers spend less than half that amount, and used car (mom and pop) lots even less. The new car dealers selling premium used only is about 35%, and the rest selling good used about 45% , the rest selling what they can get away with. Majority of new car dealers won't sell anything less than "good ".
So after reconditioning a used car to premium, wholesaling anything that cannot end up being a premium used car....get ready, that "dirty" word, a dealer trying to make a profit.

As far as your anger management problem with the service manager and the alternator. When the car made it from service manager to the mechanics, do we know they would have found the fan belt off and only charged for minimum time, or would they have replaced a good part? Well your hor headed actions, no one will ever know and you may have had an inexperienced service manager (young in the frey), or a scam man. Just Fyi, scams in new car dealers (like any business ) are far and few between.
One of the most regulated businesses in America, The New Car Dealer. Did you know that!!!!!!!'

Ok, I vented
Whew, I feel better, any questions?

Reply
Feb 21, 2017 00:33:58   #
jack sequim wa Loc: Blanchard, Idaho
 
Fay Guht wrote:
Ah. An honorable american. We can all learn from you.

Next time film em. Then follow through to the parts shop. Film them. Then post it.

I cant believe anyone would buy (for everyday use) a complicated and sophisticated car. Why pay these rates? No one can afford to pay the exorbitant rates.

Get something simple, and bank the difference.

They pidgeon us on the idea that we need to show one another up.

The car companies deserve nothing. If they can save a buck they'll let you die in an exploding Pinto or whatever.

Show no loyalty.

If you have to have a status car, buy something to use on the weekends, THAT DOESN'T DEPRECIATE. An old Lincoln. Or GTO. Or Mercedes or Rolls. Or whatever.
Ah. An honorable american. We can all learn from... (show quote)





As a retired car guy I agree. The factories make all the money. Regardless if a dealer has a loss or profit, the factory gets full price from the car dealer. There is a difference in quality, that's where my loyalty is.

Reply
Feb 21, 2017 00:42:14   #
jack sequim wa Loc: Blanchard, Idaho
 
boatbob2 wrote:
Im thinking a BIG part of the problem,is the price of new cars.the factories keep churning out these overpriced pieces of crap,and theres a gazillion of last years car models not being sold,so they offer LOOOWWW interest rates on financing,to sell their crap,that the consumers wouldnt have bought unless the interest rate was wwaayy down, and since their job pay raises (if they have a job) are stagnant,they cant afford to buy that car in the first place. AND most consumers have NO IDEA how to haggle the price of that overpriced piece of crap down,in the first place. take the car price,knock off 25%,make that offer to the dealers,and watch the fun begin. should be able to get at LEAST 10% knocked off of that car price,....
Im thinking a BIG part of the problem,is the price... (show quote)




NIt counting factory rebates, there is not a 10% profit from retail M.S.R.P to invoice in new cars anymore. Low end entry and mid level priced cars are as low as negative profit, as high as 3--4%, did you know that?
Check out online the profit margin on a Honda Fit. Are you aware that the factory invoice is actually higher than M.S.R.P? Every time a dealer sells a Honda Fit for full sticker price he loses money! Honda civics have $600-$900 profit, that's it.

Reply
Feb 21, 2017 02:16:06   #
Fay Guht
 
Mr. Sequim:

Nice explanation. Thanks. U.....R a credit to your profession.

(Although, I dont understand the expletives and the "conservative" rant. But otherwise, a truly honorable comback.

In the words of Robt E Lee when he lost,

"Ah cungradoolayet ewe, sah").

Regards.

Reply
 
 
Feb 21, 2017 04:05:52   #
jack sequim wa Loc: Blanchard, Idaho
 
Fay Guht wrote:
Mr. Sequim:

Nice explanation. Thanks. U.....R a credit to your profession.

(Although, I dont understand the expletives and the "conservative" rant. But otherwise, a truly honorable comback.

In the words of Robt E Lee when he lost,

"Ah cungradoolayet ewe, sah").

Regards.




I apologize for the expletives, not "at all" my method of expression. The long ago, old me jumped in. At any rate, just like politics there are always unjust haters of the car biz.

Take care

Reply
Feb 21, 2017 10:50:01   #
boatbob2
 
SO,you say that the service manager,wouldve found the fan belt off,and only charged labor to put the belt back on the alternator,Damn,that sounds great,BUT,IF they had not opened the hood,how could they tell it needed a new alternator? OH,you say the alternator light was on,,BIG DEAL,there could be a wiring problem,.that could be repaired,without the $1355 cost of a new alternator.Dont try to BS an old BS er,,sure,there are SOME ,honest service managers,DAMN few,most work on a commission deal (the few I know do,( maybe not all) BUT,lets say,IT really needed a new alternator,,,,,for $1355.00, overpriced as hell,you talk about the cost to the dealer to floorplan the cars,wages,property rent,so what? ,,,come on justify a $1355 alternator to me, I can go to NAPA,buy a NEW alternator,(not rebuilt) but new,I cant spend more that PROBABLY,$400.00 on it,so now,justify the $955 labor charge,like I said,there are a helluva bunch of no good C--K suckers out there.hopefully,your not one of them.......

Reply
Feb 21, 2017 12:22:34   #
jack sequim wa Loc: Blanchard, Idaho
 
boatbob2 wrote:
SO,you say that the service manager,wouldve found the fan belt off,and only charged labor to put the belt back on the alternator,Damn,that sounds great,BUT,IF they had not opened the hood,how could they tell it needed a new alternator? OH,you say the alternator light was on,,BIG DEAL,there could be a wiring problem,.that could be repaired,without the $1355 cost of a new alternator.Dont try to BS an old BS er,,sure,there are SOME ,honest service managers,DAMN few,most work on a commission deal (the few I know do,( maybe not all) BUT,lets say,IT really needed a new alternator,,,,,for $1355.00, overpriced as hell,you talk about the cost to the dealer to floorplan the cars,wages,property rent,so what? ,,,come on justify a $1355 alternator to me, I can go to NAPA,buy a NEW alternator,(not rebuilt) but new,I cant spend more that PROBABLY,$400.00 on it,so now,justify the $955 labor charge,like I said,there are a helluva bunch of no good C--K suckers out there.hopefully,your not one of them.......
SO,you say that the service manager,wouldve found ... (show quote)




I'm not trying to justify a $1,355 alternator, my point was had a mechanic been given the chance to be involved, how would have it ended? You don't know the answer. What was the experience of the service manager, majority of all service writers have never turned wrenches, did you know that?
My wife's suv needed a starter, a part I have replaced in cars myself a dozens times. $75-$125 part, a few nuts or bolts, a few wires, done. Except on her Suv, the part "cost" + 10% was $285. And 8 hours labor, at $90 an hour. Nearly the entire front end had to be removed, suspension. ...ect. so a $1,000 starter depending on vehicle (American made) is a real number, not a dealer ripping anyone off. Jeep Cherokee (late 90's) rotors could not be turned and if warped had to be replaced causing a front end brake job to jump an additional $500. Oo.
My spark plugs in my Ford F-150 4x4 due to a factory engineering flaw were nearly $1,100 due to labor intense issue's. I know Dodges for several years had models that the engines had to be completely disconnected and lifted in order to replace spark plugs in the back.
Having reconditioned THOUSANDS of used cars through my service deparments, I can say from an expert position. Many, many times I was quoted insane prices due to examples similar to what I just listed on a regular basis. How many thousand used cars have you reconditioned to know for a fact the cost of a specific part, and specific labor? Did the front end of the car need to be removed in order to get at a bolt? There are both import and domestic cars that have $350 dollar alternators, was this one of them? Being mechanical, or even a mechanic means nothing wirh the hundreds of new models, engines, transmissions that hit the market every couple years.

Reply
Feb 21, 2017 12:26:03   #
jack sequim wa Loc: Blanchard, Idaho
 
boatbob2 wrote:
SO,you say that the service manager,wouldve found the fan belt off,and only charged labor to put the belt back on the alternator,Damn,that sounds great,BUT,IF they had not opened the hood,how could they tell it needed a new alternator? OH,you say the alternator light was on,,BIG DEAL,there could be a wiring problem,.that could be repaired,without the $1355 cost of a new alternator.Dont try to BS an old BS er,,sure,there are SOME ,honest service managers,DAMN few,most work on a commission deal (the few I know do,( maybe not all) BUT,lets say,IT really needed a new alternator,,,,,for $1355.00, overpriced as hell,you talk about the cost to the dealer to floorplan the cars,wages,property rent,so what? ,,,come on justify a $1355 alternator to me, I can go to NAPA,buy a NEW alternator,(not rebuilt) but new,I cant spend more that PROBABLY,$400.00 on it,so now,justify the $955 labor charge,like I said,there are a helluva bunch of no good C--K suckers out there.hopefully,your not one of them.......
SO,you say that the service manager,wouldve found ... (show quote)


I'm not trying to justify a $1,355 alternator, my point was had a mechanic been given the chance to be involved, how would have it ended? You don't know the answer. What was the experience of the service manager, majority of all service writers have never turned wrenches, did you know that?
My wife's suv needed a starter, a part I have replaced in cars myself a dozens times. $75-$125 part, a few nuts or bolts, a few wires, done. Except on her Suv, the part "cost" + 10% was $285. And 8 hours labor, at $90 an hour. Nearly the entire front end had to be removed, suspension. ...ect. so a $1,000 starter depending on vehicle (American made) is a real number, not a dealer ripping anyone off. Jeep Cherokee (late 90's) rotors could not be turned and if warped had to be replaced causing a front end brake job to jump an additional $500. Oo.
My spark plugs in my Ford F-150 4x4 due to a factory engineering flaw were nearly $1,100 due to labor intense issue's. I know Dodges for several years had models that the engines had to be completely disconnected and lifted in order to replace spark plugs in the back.
Having reconditioned THOUSANDS of used cars through my service deparments, I can say from an expert position. Many, many times I was quoted insane prices due to examples similar to what I just listed on a regular basis. How many thousand used cars have you reconditioned to know for a fact the cost of a specific part, and specific labor? Did the front end of the car need to be removed in order to get at a bolt? There are both import and domestic cars that have $350 dollar alternators, was this one of them? Being mechanical, or even a mechanic means nothing wirh the hundreds of new models, engines, transmissions that hit the market every couple years.

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